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Kit
Menkin’s Leasing News
www.leasingnews.org Wednesday,
April 17, 2002 Accurate,
fair and unbiased news for the equipment Leasing Industry
Headlines---- Fed
Is Expected to Hold Steady on Rates for Next Few Months
Factory Strength Erases Economic Doubts-Some Say
Housing Starts Decline in March
March 2002 Monthly Report—with predictions
GATX Predicts First Quarter Report Next Week Down
Caterpillar Reported First-Quarter 2002 Earnings –Down
Rutgers, CIT Present 15th Annual New Jersey Journalism Awards
M & C Leasing Alleged Fraud Case Up-Date
Intel Reports Its Earnings Matched Expectations
How Bad is IT in Silicon Valley???---
Berry Drink from Sweden for Leasing Executives
Making Amtrak an Easier Choice ####
Denotes Press Release ----------------------------------------------------------------------------------------- Leasing
News Broken Links If
you did not receive yesterday’s Leasing News for some reason,
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the way, if you can’t find it in the archives, go to our website
and look for
“top stories” at the bottom of he days news. It highlights
what we think are
the top stories you may not have read. editor ________________________________________________________________________ Leasing
Association Conferences---Not too late to make a reservation April
22nd, Equipment Leasing Association www.elaonline.com May
1—Association for Government Leasing & Financing www.aglif.com May
2-Joint Eastern Association of Equipment Lessor & United Association
of Equipment Leasing www.eael.org
or www.uael.org May
20th—Mid-American Equipment Lessors www.mael.org _______________________________________________________________ Fed
Is Expected to Hold Steady on Rates for Next Few Months By
RICHARD W. STEVENSON Associated
Press WASHINGTON—
With new statistics today providing further evidence that the economy
is on the mend and that inflation remains under control, the Federal
Reserve now seems likely to hold steady on the interest rates it controls
for the next several months, economists said. Alan
Greenspan, the Fed chairman, is expected to give investors some guidance
about the schedule for any rate increases that may be coming when
he testifies on Wednesday before the Joint Economic Committee of Congress. Many
Fed officials have indicated in recent weeks that they are not in
a rush to raise the central bank's main rate, the federal funds target
rate on overnight loans among banks. It is currently 1.75 percent,
which is a 40- year low. Economic
indicators released today appeared to confirm the officials' view
that they could afford to be patient. The figures show an economy
that is bouncing back from the recession, the first in a decade, without
any sustained inflationary pressure other than a recent surge in oil
prices. Industrial
production in March rose 0.7 percent, its biggest gain in nearly two
years, indicating that the worst may be over for the hard-hit manufacturing
sector. The Consumer Price Index for March rose 0.3 percent, in large
part because of the rise in oil prices; excluding food and energy
costs, the index rose 0.1 percent. Fed
officials now appear all but certain to leave rates unchanged at their
next meeting, on May 7. Investors in the interest rate futures markets
are now betting that the Fed will not start tightening its policy
until this summer, perhaps as soon as the meeting on June 25-26 but
more likely at the session in early August. Mr.
Greenspan faces a choice in coming months, economists said. He can
allow the bond market to begin pushing long-term rates higher in coming
months in anticipation of a tighter policy from the Fed and a more
robust economy, they said. Or he can get out in front of the bond
market by raising the Fed's short-term rates to assure investors that
he will keep inflation in check and try to keep long-term rates from
going so high that the economy stalls again. "Given
that there is no immediate inflation risk, the Fed can afford to lead
the market into higher rates gradually," said Ian Shepherdson,
chief United States economist at High Frequency Economics, a consulting
firm. "We
doubt there will be a rate hike in May," he added, "but
we think the market is right to anticipate action in June." But
Fed officials face a particularly unsettled economic outlook, even
beyond the usual questions associated with a cyclical rebound from
a recession. The road ahead for the Fed could remain full of unexpected
twists and turns even as it makes the transition from a period of
aggressive rate cuts into what economists expect to be one of gradual
rate increases. The
economy could well be subjected to further shocks as the Bush administration
pursues its campaign against terrorism, especially if the United States
tries to topple Saddam Hussein in Iraq. And the recent volatility
in oil prices could slow the recovery. At
home, the ramifications from Enron's collapse are still rippling through
the corporate world. Internationally, the United States faces escalating
trade tensions and the drag from Japan's economic paralysis. At its
January meeting, the Fed even discussed how it would deal with a Japan-style
crisis, in which official interest rates are already near zero but
the economy needs more help from monetary policy. Then
there is the growing speculation that the Fed itself faces a significant
transition. Mr. Greenspan, who has held his post since 1987, turned
76 last month, and although he has given no indication that he intends
to retire anytime soon, there are persistent rumors in Washington
and on Wall Street that he will step aside before his current four-year
term ends in June 2004. Whatever
his own plans, Mr. Greenspan approaches the crossroads in Fed policy
having won generally high marks for his handling of the recession.
He continues to be criticized by some economists who say he raised
rates too high in 2000 and was too slow to start cutting rates when
the economy slowed late that year. But
his aggressive rate cutting — starting early last year, before
the extent of the downturn was clear — delivered a powerful boost
to the economy later in the year. And his willingness to flood the
financial system with money after Sept. 11 to help stabilize Wall
Street and the banking system helped minimize the economic damage
from the terrorist attacks and keep the recession brief and shallow. "I'd
give them an A-minus, and the minus is only because of the inexplicable
delay in acknowledging the slowdown in 2000," said John H. Makin,
an economist at the American Enterprise Institute, a research organization.
"When Greenspan became convinced they were behind the curve,
they got started and moved very quickly in a way that was breathtaking,
compared to other central banks. They made aggressive moves all year,
and they had the right response to 9/11." This
business cycle largely confirmed Mr. Greenspan's judgment on two issues
that will remain important. First, it validated his view that the
improvement in the growth rate of productivity, or business efficiency,
was more than a flash in the plan. Not only did productivity growth
hold up through the downturn, but it accelerated at the end of last
year. Second,
last year's experience has seemed to confirm that monetary policy
has not lost its punch, a criticism voiced by some economists early
in the downturn when the Fed's rate cuts did not seem to be packing
much power. Although it took deeper rate cuts than expected to revive
the economy — no one at the beginning of 2001 predicted that
the federal funds rate would drop 4.75 percentage points over the
course of the year — the Fed's actions did go a long way toward
reviving the economy. A
report this month by Mickey D. Levy, chief economist at Bank of America,
said the business cycle over the last year had disproved "the
tired mantra that monetary policy had lost its power, that this recession
was different and that a long downturn may be in prospect." Mr.
Greenspan did not get everything right. Some economists, for example,
said that he had overemphasized the potential harm to the economy
from the effect of falling stock prices on the willingness of consumers
to spend and that he was slow to pick up on the seriousness of the
downturn in business investment. Not
all economists are ready to credit Mr. Greenspan and the Fed with
rescuing the economy. Some say growth may soon stall again, now that
companies are completing the process of whittling down excess inventories. "All
the good things that happened in the economy after Sept. 11 were either
one-shot deals or are likely to run out over time," said James
K. Galbraith, an economics professor at the Lyndon B. Johnson School
of Public Affairs at the University of Texas in Austin. ------------------------------------------------------------------------------ Sun
Community Bancorp Limited Announces Leasing Services Partnership
Executive Vice President Stephen D. Todd has announced a partnership
agreement with Equipment Leasing Services, LLC (‘ELS’) and
Sun Community Bancorp Limited and our affiliate holding company, Nevada
Community Bancorp Limited. “This partnership serves an important
role,” states Mr. Todd. “We are now able to offer a complete
line of leasing services to our customers as a complement to our business
and the delivery of financial services.”
Initially, the Arizona-based equipment lessor is working with ten
affiliate banks: Arrowhead Community Bank, Camelback Community Bank,
East Valley Community Bank, Mesa Bank, Sunrise Bank of Arizona and
Valley First Community Bank in the Phoenix market, and Black Mountain
Community Bank, Desert Community Bank and Red Rock Community Bank
in Nevada.
Equipment Leasing Services, located in Carefree, Arizona, is a locally
owned firm consisting of a team of professionals with over 40 years
of leasing experience. ELS originates lease transactions nationwide
providing a broad range of sophisticated, collateralized financing
solutions. “Equipment leasing is well-positioned to take advantage
of today’s economic climate," states Scott Powell of ELS.
“Companies today are especially conscious of preserving cash,
which makes leasing a very attractive option relative to purchasing.”
Equipment leasing offers many benefits such as preservation of capital
and credit lines, creates ‘off balance sheet’ financing,
avoids obsolescence and may provide tax advantages and the opportunity
to purchase equipment at lease end. In fact, leasing remains one
of the single most widely used forms of external finance in business
today. Sun
Community Bancorp Limited is publicly traded with NASDAQ stock exchange
under the ticker symbol: SCBL and is a majority owner of 14 community
banks in the Southwest. ------------------------------------------------------------------------------ .
Factory Strength Erases Economic Doubts-Some Say By
John M. Berry Washington
Post Staff Writer Any
lingering doubts that last year's economic slump is over have been
erased by a strong rebound in U.S. factory production in the first
three months of this year and a healthy flow of new orders that points
to further gains ahead. Tuesday
the Federal Reserve reported that manufacturing output rose a solid
0.8 percent last month, the third monthly increase in a row. It was
the largest increase in two years and represented a sharp reversal
of the slide that saw factory production fall 7.6 percent between
June 2000 and last December. So
far factory managers have been able to boost production through large
gains in productivity, the amount of goods and services produced for
each hour worked. The number of workers on manufacturing payrolls
was still falling last month, although the employees still on the
job are working more hours. "There
are clear signs in these data that recovery is underway," said
Ray Stone of Stone & McCarthy, a financial markets research firm.
"The strength in March manufacturing output seems to be driven
by strong gains in high tech industries along with big gains in primary
metals and fabricated metal products. The latter probably reflects
developments in the steel industry after the United States imposed
tariffs on imported steel." Stone
noted that production of computers, semiconductors & communications
equipment continued to show significant increases, rising 1.4 percent
last month after being up 1.9 percent in February and 2.1 percent
in January. Output in the sector rose by more modest amounts in the
last three months of 2001. The
Fed also said that utility output rose 1.6 percent last month while
that of mining fell 1.6 percent, largely because of a reduction in
the number of oil drilling rigs at work. Adding those sectors to manufacturing,
the Fed's overall industrial production index rose 0.7 percent last
month. In
another report out today, the Labor Department said consumer prices
rose 0.3 percent last month, well below the 0.5 percent rise many
analysts had expected because of a surge in world oil prices. The
consumer price index increased 0.2 percent in both January and February. Excluding
volatile food and energy prices, the so-called core portion of the
CPI rose only 0.1 percent last month. It increased 2.4 percent in
the past 12 months. Energy
prices were up 3.8 percent last month, with gasoline prices at the
pump up 8 percent. Analysts said gasoline prices have risen substantially
since the department's price checkers sampled what stations were charging
last month, so that the consumer price index for April is likely to
be affected by oil costs again. But
that impact was partially offset by falling prices in some other parts
of the index. For instance, the costs of lodging away from home fell
1.6 percent, prices for new and used cars fell for the third month
in a row, costs of telephone services declined 1.2 percent and prices
of tobacco products fell 3.5 percent. The cost of computers and peripheral
equipment continued to drop, falling 2.9 percent last month and 28.7
percent in the last 12 months. "These
are good numbers," said Ian Shepherdson, chief U.S. economist
at High Frequency Economics in Valhalla, N.Y. The core inflation rate
is now at 2.4 percent, "its lowest since April 2000. There is
no near-term inflation threat here." In
a third report, the Commerce Department said housing starts fell 7.8
percent last month to an annual rate of 1.646 million units from 1.785
million in February. But even with that dip, which some analysts said
was partly due to weather and therefore likely to be reversed in April,
the average level of starts for the first quarter was an annual rate
of 1.715 million units, the highest for any quarter since the last
three months of 1998. Housing
Starts Decline in March WASHINGTON,
-- Finishing up an exceptionally strong first quarter in which housing
proved to be a significant growth factor for the national economy,
nationwide housing starts retreated 7.8 percent to a healthy seasonally
adjusted annual rate of 1.65 million units in March, the Commerce
Department reported today. The expected slip comes on the heels of
the best month for new- home production in more than three years.
"Today's
report shows housing production is right in line with our forecasts,
and the decline is certainly no cause for alarm in the housing industry,"
said Gary Garczynski, president of the National Association of Home
Builders (NAHB) and a builder/developer from Woodbridge, Va. "Thanks
to extraordinarily good weather and financing conditions early in
the year, single-family housing starts reached their highest level
in more than 20 years this February, at 1.47 million units. That pace
of activity was unsustainable in terms of underlying demographic demand.
In fact, builders would have had a hard time keeping up with such
a pace in view of shortages of available lots for development in an
era of slow-growth or no-growth land use policies in many parts of
the country." March's
decline in housing starts was confined to the single-family sector,
where production slowed 11.4 percent to a rate of 1.3 million units.
Garczynski noted that, while interest rates on long-term mortgages
had been moving up during March, they have since slipped below 7 percent
again and will support demand in the spring home buying season. Multifamily
housing starts rallied in March, rising nearly 9 percent to a seasonally
adjusted annual rate of 343,000 units. The rise in apartment building
was entirely responsible for a 15.5 percent gain in housing starts
registered in the Northeast, while every other region recorded declines
in overall housing production. In the South, the shortfall was almost
13 percent, while in the Midwest it was 7 percent and in the West
it was 6.2 percent. Housing
permits, which can be an indicator of future building activity, also
fell in March, by about 10 percent overall to a 1.6 million-unit rate.
Single-family permits were down 10.2 percent to 1.2 million units,
while multifamily permits were down 8.6 percent to 361,000 units.
"These
are still quite good numbers," Garczynski noted. "For the
year as a whole, we're on pace to produce about 1.64 million new housing
units, up by about 2 percent from last year." NAHB
Chief Economist David Seiders added that recent reports of a "housing
bubble" are far from substantiated. "We just don't see an
impending bust in housing production or house prices -- the demographics
are good, inflation is in check, interest rates are under control
and economic strength is building in the U.S. and abroad. But now
that the housing industry has helped lead the economy to recovery,
we do see a 'passing of the baton' to the manufacturing sector and
others to carry forward the economic recovery and become key engines
of growth. Housing production and sales should settle into healthy
and sustainable patterns as the economic expansion evolves over the
balance of this year." From:
Carl Villella, CLP Onyx
Capital Corp. 8150
Perry Hwy. Suite 211 Pittsburgh,
Pa. 15237 412-366-6100 412-366-9144
fax 412-980-6139
cell –
March 2002 Housing Starts Report ( great economic info )
Starts
fell, as expected in March, to a 1.646 million rate (SAAR), down 7.8%
from February’s weather enhanced rate. Single-family activity
fell 11.4% to a SAAR rate of 1.303 million. Permits, an indicator
of future activity, were down 10% (1.599 million SAAR). Single-family
permits were also down (10.2%). Regionally, all regions fell with
the exception of the Northeast, which was up 15.5%, although Northeastern
permits were off 26%.
Analysis
and outlook: As mentioned by “CBS Marketwatch”
analysts, “the slowdown in housing starts likely reflects a payback
from the warm winter weather, which has allowed builders to start
construction earlier in the year than usual”. However, despite
the decline, starts are up 5% over 2001’s pace. Housing fundamentals
remain strong: mortgage rates, a key determinant, hovered around
7% in March; consumer confidence continues to strengthen; inflation
at the retail level (CPI) is a non event although energy price increases
pushed wholesale prices higher in March; solid appreciation in house
values is encouraging homeowners to continue trading up on their equity
gains; income gains continue to outstrip house price increases keeping
houses affordable; and inventories remain low (about 4 months).
Some problems continue: business investment remains weak; unemployment
is higher and firms will refrain from hiring back employees until
they are convinced “the recovery has legs”. The main concern
(other than political problems in the Mideast and elsewhere) will
be the speed of the recovery – if too rapid, the Fed will have
to aggressively raise rates, and that will slow housing in the 2nd
half. Productivity improvements should help to keep inflation down
however, as the economy strengthens throughout the rest of the year.
The
latest NAHB forecast (March 27), calls for 1.636 million starts this
year, with 1.306 million single-family starts (up about 2% from 2001).
The second quarter may see some pullback due to weather-enhanced starts
in the 1st quarter. The key to stable housing demand is interest
rates, consumer confidence, and the employment picture. Fundamentals
remain solid for the rest of 2002 with the main unknown being unrest
in the Mideast (and impact on energy prices) and continuing progress
on the terrorist front. Longer term, solid demographics point to
good demand for the remainder of the decade, including remodeling.
In fact, remodeling expenditures should surpass spending on new housing
sometime this decade. What’s driving remodeling? Demographics
and the fact that there are 120 million housing units, of which about
30% are over 30 years old. The main unknown with demographics is
future immigration – if September 11th alters immigration
levels measurably, housing will be affected because immigrants (and
minorities) will account for an increasing share of shelter demand
throughout the rest of the decade. One last comment – some
people are suggesting we had a “housing bubble” over the
past several years, and that it will eventually burst. Don’t
believe it – there is no evidence that a significant number of
buyers bought homes solely to flip them a short time later. Today’s
healthy housing market is based on immigration enhanced demographics,
attractive interest rates (lack of inflation thanks to better productivity),
the strong economy, and a number of other factors, and not speculation!!!! #####
#################################################### Pomeroy
Computer Completes Sale of Leasing Division to ILC Pomeroy
Computer Resources announced the closing of the sale of a majority
of the net assets of its wholly owned subsidiary - Technology
Information Financial Services - to Information Leasing, the leasing
division of The Provident Bank of Cincinnati, OH. The terms of the
sale were announced on February 28, 2002. The
Pomeroy Companies provide complete e-commerce infrastructure integration,
broadband and desk-side integration services. The Pomeroy Companies
have clientele across a broad spectrum of industries, governments
and educational organizations. The Pomeroy Companies employ approximately
1,800 individuals, more than half of whom are technical personnel,
and maintain 30 regional facilities in Alabama, Florida, Georgia,
Indiana, Iowa, Kentucky, Minnesota, North Carolina, Ohio, Oklahoma,
Pennsylvania, South Carolina, Tennessee, Texas and West Virginia.
For the year ended January 5, 2002, the Companies reported revenues
of $809 million. ####
########################################################### GATX
Corporation Comments on Expected First Quarter Results --Down
The company
also announced that a slide presentation for fixed income investors
is currently available at www.gatx.com
. The slide presentation contains a general business overview as well
as an update on the company's air portfolio. COMPANY
DESCRIPTION GATX
Corporation (NYSE: GMT) is a specialized finance and leasing company.
It uniquely combines asset knowledge and services, structuring expertise,
creative partnering and risk capital to provide business solutions
to customers and partners worldwide. GATX specializes in railcar and
locomotive leasing, aircraft operating leasing, information technology
leasing, venture finance and diversified finance. #################
################################# Caterpillar
Reported First-Quarter 2002 Earnings --Down Caterpillar
Inc. reported first-quarter 2002 sales and revenues of $4.41 billion
and profit of $80 million or 23 cents per share. Sales
and revenues of $4.41 billion compared with $4.81 billion in the first
quarter of 2001. Sales for the quarter were higher in Asia/Pacific
and Latin America, partially offsetting declines in North America
and Europe, Africa and the Middle East. North American truck and bus
engine sales rebounded substantially from low levels, helping offset
declines in mining, general construction and electric power generation.
Caterpillar’s Financial Products Division continued its strong
performance. Profit
was $80 million or 23 cents per share compared with $162 million or
47 cents per share in the first quarter 2001. Company profit declined
primarily because of lower sales of larger machines and engines and
related manufacturing inefficiencies Chairman's
Quarterly Comments The information
included in the Outlook section is forward looking and involves risks
and uncertainties that could significantly affect expected results.
A discussion of these risks and uncertainties is contained in Form
8-K filed with the Securities & Exchange Commission (SEC) on April
16, 2002. ###
################################ ################### Rutgers
University, CIT Present Fifteenth Annual New Jersey Journalism Awards NEW
BRUNSWICK, N.J. — The Department of Journalism and Media Studies
of Rutgers University and CIT, a Livingston, New Jersey-based global
source for financing and leasing capital, presented the Fifteenth
Annual Journalism Awards for Distinguished Business & Financial
Reporting of New Jersey Issues on Thursday, April 11th . This year
was marked with more entries than ever before, and the quality of
writing made decisions difficult, resulting in a tie for the winner
in the Large Daily category. The awards, for articles published in
2001, went to: David
P. Willis, The Asbury Park Press High-Tech
Wave Puts Charge into Economy Best
Article, Large Daily Publication (60,000 circulation and above) John
Froonjian and Eileen Bennett, The Press of Atlantic City Without
Transportation, Many Lives Go Nowhere Best
Article, Large Daily Publication (60,000 circulation and above) Dan
Goldblatt, Business News New Jersey The
All Seeing Eye Best
Article, Small Daily Publication (under 60,000 circulation) Lauren
Otis, New Jersey Monthly The
Players Best
Article, Non-Daily Publication Anne
L. Malyska, The Item of Millburn & Short Hills DMDA
Future Uncertain Honorable
Mention, Non-Daily Publication This
is the sixth CIT/Rutgers award earned by The Asbury Park Press. The
Press of Atlantic City and New Jersey Monthly are also past winners,
while Business News New Jersey and The Item of Millburn & Short
Hills are both first-time winners. Other past winners have included
The Star-Ledger, The Bridgeton Evening News, The Courier-News, The
Times of Trenton, The Westfield Record, The Sandpaper and Compass
Magazine. A
cash prize of $2,500 was awarded for Best Article in each of the three
categories, and a prize of $500 was awarded for Honorable Mention.
Allan
Sloan, Wall Street Editor for Newsweek Keynotes Ceremony Allan
Sloan, Wall Street Editor at Newsweek, addressed the journalists,
faculty and students gathered at The Rutgers Club on Rutgers University's
New Brunswick campus for the awards ceremony. Sloan, an award-winning
journalist whose 30 years in business writing give him a unique perspective
on the changing business climate throughout the country, provided
guests with humor and insight into the challenges facing today's business
journalists. In
introducing Mr. Sloan, Kelley Gipson, senior vice president, director
of marketing and corporate communications for CIT, highlighted how
the events of 2001 affected the reporting of business issues. "2001
was truly a memorable year for business reporting in this state. We
were faced with the beginnings of a recession, the burst of the dot
com bubble and varying crises of confidence,” Ms. Gipson said.
“Then, on September 11th, when the country faced an unimaginable
terrorist attack, journalists were once again put to the test. The
constant need for information had many, especially the reporters in
New Jersey, working 'round the clock. Facing the situation head on,
business reporters addressed these issues and provided us with the
information we needed to begin to emerge from these harrowing events
a stronger and more informed nation.” Officiating
with Ms. Gipson was Dr. Linda Steiner, chair of the Department of
Journalism and Media Studies of the Rutgers School of Communications,
Information and Library Science. Judges
for the competition were Stephen D. Isaacs, professor and associate
dean, Graduate School of Journalism, Columbia University; Richard
Petrow, professor of Journalism, New York University; and Robert Comstock,
Assistant Director of the Journalism Resources Institute, Rutgers
University. ####
############################################################
M & C Leasing Alleged Fraud Case Up-Date From
John Gallo
Address = 85 River Rock Drive
City = Buffalo
State = New York
Zipcode = 14207
Phone = 1-800-416-9080
Fax = 716-873-1002
Email = john@mcleasing.com
= Kit, I just wanted to update everyone on M & C Leasing Co. fraud
case against Bridge Transport and AKL International in North Carolina.
This has been a long road since 11/01 but the FBI has finally taken
the case and is going to pursue this. I ask all of the other leasing
companies that have any information on either of these companies to
please contact me and hold on to any paperwork as we will need any
and all data to put these people away. Fraud has become a major problem
in lease funding. We need to address this as an industry to eliminate
future problems. Thank you to all of those who responded to our first
alert. Excellent
Monthly Business Leasing News
David
G. Mayer, Esq. “Business Leasing News” A monthly newsletter
with excellent information.
Definitely worth reading. You can also ask to get it mailed directly.
Here is
the link to the latest edition: http://www.pblaw.com/newsletters/bln/Release/bln_2002_04.htm -------------------------------------------------------------------------------------------------- Tonight
at 10pm on TV---Salvation Army work at the WTC site. I
am pleased to inform you of upcoming news special that will feature some
of The Salvation Army's work at the WTC site. Spring
Break 2002 - Students use their Break to join The Salvation Army in helping
NY's Bravest and Finest On
Wednesday, April 17 at 10pm, Dan Rather and CBS News' 48
HOURS take you behind the scenes of Spring Break 2002. As part
of this story,
CBS followed a group of students, who came to New York City this March
and volunteered on the Salvation Army Ground Zero clean-up/rescue operation. Please
tune in for this broadcast. For more information please visit http://www.salvationarmy-newyork.org/insidearmy/48hours.htm Sincerely, Burt
Mason Web
Administrator The
Salvation Army of Greater New York Intel
Reports Its Earnings Matched Expectations By
CHRIS GAITHER SAN
FRANCISCO, - The Intel Corporation, the world's largest chip maker,
continued its slow climb from the bottom of the worst slump in the
industry's downturn today. Its first-quarter earnings matched Wall
Street's estimates, helped by slightly better-than-expected strength
in its vital microprocessor business. The
first of the technology bellwethers to release earnings results this
week, Intel reported a profit of $936 million, or 14 cents a share,
for the first quarter. Profits were up sharply from the 2001 quarter,
when Intel earned 7 cents a share, but much of the improvement was
related to a change to comply with new accounting standards. Excluding
special items related to acquisitions, Intel earned $1 billion, or
15 cents a share, declining by a penny a share from the first quarter
of 2001. The results met Wall Street analysts' expectations, according
to Thomson Financial/First Call. At
$6.8 billion, sales increased over the previous year for the first
time in four quarters, reaffirming claims from chip makers and analysts
that the steep falloff in semiconductor purchases by computer makers
had reversed course. But
Intel's managers remained cautious, attributing the revenue growth
to normal sales patterns rather than the early signs of a major rebound
in the industry's fortunes. ``We
are not seeing a recovery in our business - we're seeing seasonality,'' said
Andy D. Bryant, the chief financial officer. The
slow growth is expected to continue through the current quarter. Intel
predicted that profit margins would improve slightly and issued a
sales forecast of $6.4 billion to $7.0 billion, up from $6.3 billion
last year. The broadness of the range, increasingly common from Intel,
highlights the uncertainty among Intel executives over the cloudy
economic outlook. ``It's
a range you could drive a truck through,'' said Ashok Kumar, an analyst
with U.S. Bancorp Piper Jaffray. In
regular trading before the release, shares of Intel rose $1.40, or
5 percent, to $29.51. A
$300 million settlement, announced Monday, of a patent lawsuit brought
by Intergraph weighed on Intel's results. The company said it would
take a $155 million charge to pay the settlement, which reduced its
earnings by a penny a share. Intel
agreed to settle claims that its Pentium family of microprocessors
had infringed upon Intergraph's patents. Another
lawsuit, which contends that Intel's Itanium chips for data-serving
computers infringe on Intergraph's patents, is pending in Marshall,
Tex. During mediation required by the court, Intel agreed to pay $150
million if it loses the case and an additional $100 million if it
files and loses an appeal. During
the quarter, Intel was helped by better-than-expected sales of its
microprocessors for personal and data-serving computers, as well as
the components that accompany those chips. After falling behind on
orders for its Pentium 4 chips, Intel said it was finally able to
fulfill all orders and even stockpile some of the new chips. Their
higher prices pushed the average price upward, giving profits a boost. But
other parts of Intel's business remained soft. Sales of networking
chips and memory chips for communications devices like cellphones
declined sharply from the fourth quarter. The
company's chief executive, Craig R. Barrett, said in a statement that
Intel had been served well by its ``aggressive R.&D. and manufacturing
investments.'' But
he added that ``while demand in emerging markets remains solid, established
markets such as the United States and Europe continue to be impacted''
by weak technology spending. Analysts
expect Intel to come under increasing attack from Advanced Micro Devices
, which is readying new chips for products in which Intel has long
excelled, like notebook computers and servers. ``The
places where Intel can truly dominate are starting to shrink a little
bit,'' said Eric Ross, an analyst with Thomas Weisel Partners. Mr.
Ross said he expected to see a rise in PC sales in the second half
of this year and a sharp upturn in 2003. Intel's managers declined
to comment on the prospects for a broader recovery, but Mr. Kumar,
the analyst, expressed his doubts. ``It's
likely that the economic recovery will largely bypass the tech sector
this year,'' he said, ``and it's unlikely that we'll see a meaningful
pickup in the PC business until next year.'' ------------------------------------------------------------------------------------------------------------ How
Bad is IT in Silicon Valley???--- Major
Charity Ball hurting FUTURE
OF EVENT MAY BE IN DOUBT By
John Boudreau San
Jose Mercury News Organizers
of the Silicon Valley Charity Ball fear they won't meet their goal
of raising $500,000 for non-profits
this year -- a target that already was just a third of what the ball
pulled in last year. Facing
their toughest fundraising season ever, leaders of the ball, which
has funneled $10 million to 175 local non-profits over the years,
are ``soul searching'' about whether this Saturday's 16th annual philanthropic
party will be the last. ``It
is brutal out there,'' said an exhausted ball president David Heiman,
who has been calling valley tech corporations, the event's principal
supporters, and individuals with last-minute pleas. This year, some
aren't returning the calls. ``There
still is a lot of uncertainty in the economy,'' said Heiman. ``People
don't feel as wealthy as they used to feel.'' After
this year's black-tie event, the Silicon Valley Charity Ball Foundation's
14 board members will meet to discuss how -- or if -- the fundraiser
will continue. ``That's something the board will look at,'' said Susan
Currie, a ball founder. ``We'd like to see it get to 20.'' In
2000, when the Internet boom was in full bloom, 3,500 revelers packed
the San Jose McEnery Convention Center. Between 1,600 and 1,800 people
are expected this year. Last year, the event had 11 ``valley visionaries,''
companies that underwrote the ball with $50,000 checks. This year,
only six signed on. Telephone
system maker Avaya, a ``valley visionary'' last year that announced
the elimination of 1,900 jobs last month, isn't buying tables Saturday.
``Our expectation is we will continue to support it going forward,''
said company spokesman Renaldo Juanso. ``It just did not work out
this year.'' While
the underlying problem may be economic, companies cited other reasons
for pulling out. Some worried about the image of executives sipping
vodka martinis during dire economic times. ``They
are laying people off. How does it look to their employees if their
executives are going to a black-tie affair?'' observed ball treasurer
Nick Streit. ``It's not the dollars. It's the perception.'' At
least two companies, Cisco Systems and KLA-Tencor, said their decisions
to sit out this year's ball were based on a shift in giving philosophy. ``Cisco
has been moving away from sponsorship of tables and more to providing
direct support to organizations and programs,'' said company spokesman
Chris Peacock. In the past, the San Jose networking giant, one of
the valley's most prolific philanthropic companies, played a prominent
role at the ball. Company Chairman John Morgridge established an unofficial
tradition of auctioning off his shirts. (He raised a total of $32,000
for the ball's charities in 1999 and 2000.) KLA-Tencor,
a San Jose chip-equipment maker, also decided not to renew its ball
sponsorship. In the past, the company rewarded top-performing employees
with a trip to the ball. This year, employees can direct some of the
company's philanthropy to charities of their choice. ``It's not a
downturn issue,'' company spokesman Kern Beare said. ``It's what we
feel is a more effective way to allocate money.'' This
shifting strategy on giving raises the question of whether the valley's
New Economy titans will continue to support what some might consider
old-line philanthropy of cummerbunds and champagne. ``Something that
is 16 years old all of a sudden becomes establishment,'' said Steve
Tedesco, executive director of the Boys & Girls Club of Silicon
Valley and one of the ball's founders. Some
companies are concerned with the ball's cost, which ranges from 20
percent to 40 percent of revenue, depending on the headlining entertainment
and the number of attendees. Last year, the ball paid $150,000, plus
expenses, to comedian Bill Cosby, Streit said. This year's headline
entertainment, San Francisco's cabaret troupe Beach Blanket Babylon,
will cost about 75 percent less, he added. ``It
may be that in this climate -- after Sept. 11th and with the economy
-- that method of raising money just isn't the tone of the times,''
observed Peter Hero, president of Community Foundation Silicon Valley,
which works with executives to set up corporate foundations. Ball
organizers and some in the non-profit sector say the event is about
much more than providing financial support to 39 local charities.
It is a celebration of philanthropy that spotlights both givers and
recipients, provides networking opportunities for both, and creates
a culture of giving. ``I
think events like the Silicon Valley Charity Ball are very important
in building a sense of community,'' said Kirk Hanson, an expert in
corporate responsibility and executive director of the Markkula Center
for Applied Ethics at Santa Clara University. ``A charity ball like
this will lead some executives and companies to be more charitable.'' To
be sure, the ball still generates enormous support. Indeed, raising
$500,000 in one night is no small feat, particularly these days. ``The
charity ball really brought high tech into the charity business,''
said Patricia Gardner, executive director of the Silicon Valley Council
of Nonprofits. In
light of these more somber times, ball organizers wrestled with whether
to tone down the event and not make it a black-tie evening. Though
they decided to keep the ball formal, the evening will have fewer
frills. (The theme, ``Fly Me to the Stars,'' points to a brighter
future.) Whether
the ball continues in its current form, takes a one-year hiatus or
becomes something entirely different remains to be seen. Organizers
approach the ball the way business is conducted in the valley: in
a highly competitive fashion, said Tedesco, a member of the ball advisory
council. If in fact the ball has reached its peak, leaders might want
to try something else, he added. ``The people who are running it are
not plateau-minded,'' Tedesco said. ``These
things have a life cycle,'' he said. ``Sixteen years -- that's a hell
of a life cycle for an event.'' Wives
of Leasing Executives find power of love in berry drink from Sweden Reputed
love potion Niagara has made its way from Little Rock, Ark., to the
East Bay; next it may appear on Big Screen By
Janet Adamy CONTRA
COSTA TIMES MORAGA
- Last year, Arkansas coffee shop owner Lari Williams turned a little-known
Swedish berry drink into a sought-after love potion -- a story that
has inspired plans for a Hollywood movie. Now
Debbie Levy is hoping to put her Moraga deli on the map by becoming
one of the first to sell the drink in the East Bay. The owner of Gourmet
Glazed Hams Deli Cafe and Catering last week began peddling Niagara,
the $5-a-bottle elixir that has developed a reputation for triggering
the libido. Niagara,
sold in an attractively labeled 6.6 oz. blue bottle, is nothing more
than a caffeine-infused carbonated beverage with several exotic-sounding
herbs. There is no scientific evidence that the drink's effects are
any different from those of a can of soda. But
through shrewd marketing, Williams managed to draw droves of women
to Wycoff Coffee in Little Rock, Ark., and distribute 4 million bottles
nationwide last year. It helped -- and later hurt -- that its name
sounds so much like Viagra. Williams,
41, stumbled on the drink at a Dallas trade show in January of last
year. Even though it wasn't selling in Sweden, where it originated,
Williams invested in 1,584 bottles. She generated initial interest
by selling it to women who touted it in Little Rock's high-society
circles. Then a local television station did a segment on the drink,
and the demand hasn't subsided since. The
coffee shop started getting as many as 2,000 phone calls a day --
so many that it temporarily blew out the local phone system and conditioned
phone operators to know the number by memory. At one time, 87 people
lined up outside her shop for the drink. Barbara
Lester, wife of Charlie, swears by the exlir. Barbara Kropschot, wife of
Bruce, says it is her daily drink. Pat Roberts drinks it daily for
breakfast. The
incoming president of the United Association of Equipment Leasing, Betty
Kerhoulas, says her husband won’t let her drink it any more.
Bob Cragin of
CIT says his wife can’t handle it. Williams
sold the coffee shop in January and is now focused on distributing
the drink with her husband, Roger Williams. "All
I wanted to do was bring romance back to Arkansas, and now we're doing
it to the whole wide world," Williams said. Her
story is the inspiration for a movie that's in the works with the
production companies for actors Adam Sandler and Julia Roberts, according
to Tom McNulty, a development executive with Sandler's production
company. Called "Tonic," the script is currently being written,
and the movie won't appear in theaters for about two years. If
Levy of Moraga can get a fraction of that attention for having it
in her store, she'll be happy. After seeing it discussed on a talk
show, Levy decided she had to get it in her stores. So she ordered
96 bottles to sell alongside the turkey sandwiches and ham quiche. "I'm
just hoping it will bring people from out of the area into the shopping
center," Levy said. "I'm hoping to sell a case a week, put
a few smiles on these ladies' faces." While the drink is not
geared toward either gender, women have been far more interested in
it than men. Levy
has placed advertisement cards on the door and every one of the dozen
tables in her deli and wears a Niagara T-shirt when she goes to the
bowling alley with her husband. She's sold 24 bottles since it hit
the counter Thursday. But
does it work? A Food and Drug Administration spokeswoman said the
agency categorizes it as a dietary supplement, which it doesn't regulate,
and would not comment on the drink's effectiveness. Neither
Williams nor Levy offer any guarantees, but they do say it worked
for them. Users say it makes them feel warm and more responsive to
touch. Yes,
that could be the caffeine. And yes, it could be the power of suggestion. "I
think anything is psychological," Williams said. But the sales
speak for themselves, she contends. So do the thank you notes and
flowers she's received from satisfied husbands and wives. Jest
Jewels, a San Francisco accessories store that's one of a handful
of Bay Area retailers selling it, has moved 150 bottles in two weeks
with the help of a Valentine's Day display and a segment on KRON Channel
4, owner Leslie Drapkin said. Because
its name rhymes with the name of the popular erectile dysfunction
drug, Niagara won the distinction "the female Viagra" when
it first became popular last year. Pfizer then filed a lawsuit against
Williams, and the Swedish drink manufacturer announced in August it
would change Niagara's name to Nexcite. Levy is still selling the
drink under the Niagara label. Mike
Miller of Concord is among those willing to test the drink. The Concord
plumber, who was at Levy's deli Monday to fix the pipes, bought two
bottles of Niagara to try with his wife of 13 years. "I
don't believe it," he said after placing his order for the drinks
and a vegetable sandwich. Then
he thought for a moment. "I mean, I don't know. I figure I'd
try it." “Maybe
it might spark the leasing industry.” says Rochelle Goodman. Making
Amtrak an Easier Choice By
JOE SHARKEY This
is a very important announcement," said a raspy voice on the
loudspeaker. All of us in the airport departure lounge sat up straight
and paid attention. "If
you have to go to the bathroom, you must do so now," the voice
ordered. "Once you are on board the airplane, no one may get
up to use the bathroom. So do so now if necessary." Dragging
their carry-ons, several people scuttled away to find the facilities.
Of the rest of us sitting there meekly awaiting further instructions,
at least one of us was thinking, now I know how the kids in the back
seat used to feel like when they were read the riot act at the onset
of those family holidays. This
incident occurred just the other day, when I needed to make a day
trip to Washington. The ticket, Newark International to Reagan National
and back, a round trip of less than 300 miles, cost $488, which is
the standard business fare when you don't book weeks in advance. You
might recall me bragging in this space last week about how clever
I was recently, scoring a $309 round-trip fare from Newark to San
Francisco for a business trip. Now here I sat with a ridiculously
expensive ticket for a 37-minute flight, listening to a lecture about
using the bathroom because security doesn't allow passengers to get
out of their seats on the short hop to Washington. You
might ask, why didn't I instead take the train, where I could stroll
the aisle, use the bathroom, plug in my laptop, buy a sandwich, snooze
in comfort — for about half the airplane fare? Full disclosure:
I forgot. In my haste to make arrangements for a last-minute trip,
it just didn't occur to me to factor in the quite excellent alternative
to flying afforded by Amtrak's Northeast corridor lines, which include
the nation's finest train service, the high-speed Acela Express. Aware
that many business travelers do not routinely evaluate viable rail
alternatives when booking trips, Amtrak will announce today an important
arrangement with GetThere, a Sabre subsidiary that supplies customized
Web booking engines for more than 800 big corporations, including
half of the Fortune 200. Starting
this fall, corporate travelers using company online booking sites
managed by GetThere will find Amtrak's reservations system fully integrated
into the booking process along with airlines. In
a faint but still discernable echo of a rail boom that is competing
strongly with intercity air transport in Europe, Amtrak has been racking
up rider ship gains on its regional lines as business travelers find
reasonable alternatives to the high fares and chronic problems of
airlines and airports. Many business cities in Europe are within 300 miles of each other. In the United States, regional city pairs like those in the Northeast corridor approximate that kind of geography. During
its first full year of operation in 2001, Amtrak's premier Acela Express
service on the Boston-New York-Washington run failed to meet initial
rider ship projections. But it is now running 5 percent ahead of projections
so far this year, and has emerged as a serious competitor to air travel
on those routes. In
its alliance with the rapidly growing GetThere — which says it
nearly doubled its corporate travel bookings last year, to more than
six million — Amtrak will be integrated into the desktop booking
environment to "become part of the universe" for business-travel
decisions, said Alan Orchison, Amtrak's senior director for industry
alliances and marketing. Someone
booking a trip to, say, Washington, on a GetThere-sponsored portal
would see a display of airline fares and schedules as well as rail
alternatives for the same itinerary, said Karina Van Veen, an Amtrak
spokeswoman. "The air shuttle will come up, but so will Amtrak,"
she said. "The
most important aspect of the technology is the way it provides the
traveler with an integrated view of all the options directly on their
screen," said Mark Orttung, the vice president for product marketing
at GetThere. "It's all right there." Besides
the heavily traveled Northeast Corridor, Amtrak is attracting more
business travel on its routes between Los Angeles and San Diego; Chicago
and Milwaukee; and Portland, Ore., and Seattle, Wash., Mr. Orchison
said. With the Get-There alliance, he added, a traveler who needs
to fly to Milwaukee with a connection through Chicago would immediately
see the option of taking a train, rather than flying, from Chicago
to Milwaukee. Amtrak,
which is nevertheless struggling financially and has threatened to
eliminate long-distance trains, its biggest money-losing service,
recently entered into a code-sharing arrangement with Continental
Airlines that enables passengers to use air-rail combinations more
easily on certain routes along the Northeast Corridor. Under
that agreement, passengers making Continental reservations can simultaneously
book any of the 17 Amtrak connections between the Newark airport,
the Northeast Corridor and Philadelphia. This effectively links Amtrak
customers from Philadelphia; Wilmington, Del.; Stamford, Conn.; and
New Haven to Continental flights out of its Newark hub. The
GetThere alliance further increases that exposure. "We're on
millions of corporate employee desktops, and they're really the buyers
who own this marketplace," said Mr. Orttung of GetThere. "We're
not biased one way or another" between air or rail, "but
our main goal was to give them a good set of options," he said. For
corporate travel managers, who need to have accurate data to maintain
contracts and discount arrangements with various suppliers, the GetThere
system will incorporate Amtrak bookings into both corporate and individual
travel profiles. This is done through a feature that keeps a record
of bookings from all sources as well as spending trends and even individual
itineraries. In
all, GetThere is currently available on more than five million desktops.
That number grew substantially last year, even before Sept. 11. A
souring economy was part of the reason. "The
recession pushed more people online," Mr. Orttung said. Corporate
travel managers who have encouraged or in some cases mandated the
use of online intranet booking systems like GetThere's often express
amazement about the enthusiasm which some employees bring to the idea
of making cheaper travel arrangements, once given the tools to do
so in a way that makes sense to them individually. As
they become better accustomed to the greater individual choices available
on intranet booking systems, those users have been forming networks
inside and outside their companies. "They're organizing their
own user groups to talk about their best practices" and to discuss
better ideas for integrating all aspects of business travel —
transportation, accommodations and everything else they have to arrange
on the road, he said. The
demand for melding Amtrak itineraries into the booking mix came from
some of those networks, Mr. Orttung said. "This is one where
our customers in the Northeast really wanted it," he added. "A
group of our customers got together and said, `Here's our top item:
Amtrak www.leasingnews.org |
